Assume a company purchased inventory for $15 cash and then sold it to a costumer for $14 on account. Assuming no other changes, what is the change in the company’s Retained Earnings? (If the RE’s decrease, use a negative sign “-”)
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- If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?On June 1, Calumet Corp. paid $25,000 for inventory previously purchased on account. Which of the following statements is correct with respect to how this transaction should be shown on the transaction worksheet? Select one: a. The cash account will decrease and the deferred revenue account will decrease. b. The inventory account will decrease and the cash account will decrease. c. The cash account will decrease and the accounts payable account will decrease. d. The cash account will decrease and the retained earnings account will decrease. e. The cash account will increase and the accounts payable account will increase.In a recent annual report, J.M. Smucker, changed a previously reported inventory amount of $52 million to $54 million. How can an accounting change cause a company to increase a previously reported inventory amount? Are all accounting changes reported this way? If not, what are the other approaches to reporting accounting changes and provide an example for each.
- 1. In 2021, Jules Company realized that its ending inventory was understated byP1,500 in 2019. How should Jules Company handle this? a. An adjustment to reduce inventory by P1,500 needs to be made. b. An adjustment to increase cost of goods sold (COGS) by P1,500 needs to be made. c. An adjustment to increase inventory by P1,500 needs to be made. d. No adjustment needs to be made. 2. For interim reporting, a loss on sale of a business segment occurring in the third quarter is A. Recognized and allocated over the quarters B. Recognized and allocated over four quarters C. Recognized immediately in the third quarter D. Deferred until the annual reporting 3. Under PFRS 8, which of the following is not a criterion used to determine reportable segments? A. Segment assets B. Segment liabilities C. Segment sales D. Operating profit or loss 4. Which among the following errors could cause an understatement of owners' equity and…Vijayan Ltd. furnishes the following income statement for the year ending 31st December 2007, prepared on the basis of conventional accounting. You are required to adjust the same for price level changes under CPP method. Particulars Rs. Rs. Sales Less: Cost of goods sold: Opening Inventory Add: Purchases Less: Closing Inventory Add: Expenses Wages and Salaries Other Expenses Depreciation on building Interest Net Income Dividends Retained Earnings 8,000 60,000 68,000 6,000 62,000 6,000 4,000 500 500 90000 73,000 17,000 5,000 12,000 Additional information: General Price Index as of 1st Jan 2007: 100; 31st March 2011: 200; Average Index for the year: 150.Interest and dividend are paid on Dec.31. Building was purchased when the index was 50. (OR) 2B. The following data are available from the books of M/s Salin Ltd as on 31st March 2003 Particulars 1st April 2002 31st…Violations of Assumptions and PrinciplesThe following are accounting procedures and practices used by severalcompanies. A. As soon as it purchases inventory, Sokolich Company records thepurchase price as cost of goods sold to simplify its accountingprocedures.B. At the end of each year, Sloan Company records and reports the value of its land based on appraisal values.C. Ebert Company prepares financial statements only every twoyears to reduce its costs of preparing the statements.D. Guthrie Company receives orders from customers and recordsrevenue at that time, even though it has not yet delivered products or services to the customers.E. Because of inflation, Cross Company adjusts its financialstatements each year to show the current purchasing power for allitems. F. David Thomas combines his personal transactions and businesstransactions when he prepares his company's financial statementsso that he can tell how well he is doing on an "overall" basis.G. At the end of each year, Vann…
- 1. Swing Ltd uses FIFO for its inventory, which is valued at $21,000. It is considering a change to moving weighted average, which would change the valuation of inventory to $22,500. Which of the following would be decreased by the change? a. Cost of goods sold b. Sales c. Liabilities d. Withdrawals 2. Which of the following is NOT an accounting method that could be chosen by a company to increase reported profits in a particular year? a. Understating allowance for doubtful debts b. Classifying longer-term receivables as current assets c. Changing estimates of the useful life of plant and equipment d. Changing inventory valuation method 3. Which of the following statements about the use of the FIFO assumption is NOT true? a. The FIFO assumption assigns the more recent purchase costs to the balance sheet inventory asset account. b. The FIFO assumption is not affected by the inventory control method. c. In periods of rising prices it produces a higher profit than…A company has several branch operations that sell merchandise transferred from the home office. This inventory at billed price of 20 percent more than cost. In producing financial statements for the company as a whole, what happens at the end of the year?A. The unrealized gain on any remaining inventory is eliminated for financial reporting purposes.B. The gain remains as reported since the amount would be immaterial.C. Any remaining gain is reported as a contra balance to the Purchase account.D. Any remaining is reported as a contra balance to the Branch account. Answer pleasePresented below is information for Novak Corp. for the month of January 2022. Cost of goods sold $216,128 Rent expense $34,000 Freight-out 6,000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 20,000 Salaries and wages expense 56,000 Sales revenue 380,000 (a) Prepare a multiple-step income statement. (If there is a net loss then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Novak Corp.Income Statementchoose the accounting period select an opening name for section one enter an income statement item $enter a dollar amount select between addition and deduction : enter an income statement item $enter…
- 3. The following records were taken from the books of the Company and its branch on December 31, 2021: (see image below) Expenses incurred by the HO is P382,000 and branch incurred P101,500. In 2021, home office billed the branch at 120% of cost which was lower by 5% than last year’s. The Company applies FIFO inventory system What is the a.combined net income and b. balance of the Unrealized Gain account?Sigma Corporation experiences a decrease in sales and cost of goods sold, an increase in accounts receivable, and no change in inventory. If all else is held constant, what is the total effect of these changes on the inventory ratio? A)Increased B)Decreased C)Undetermined D)No answer text provided.When a company determines that the net realizable value of its ending inventory is lower than its cost, what would be the effect(s) of the adjustment to write down inventory to net realizable value? a. Decrease total assets. b. Decrease net income. c. Decrease retained earnings. d. All of these answer choices are correct.
